Commanding Heights Essay

Episode 1 The Battle of Ideas begs a comparison between collectivism and capitalism. It traces the worlds economic history from the primal 1900s to the events following 9/11. Asks the question which is a better and more foolproof economic strategy government control or impoverished markets? It delves into how the First World War impacted two shiny economists, Keynes and Hayek. And then follows both Keynes and Hayek through their respective career paths (Keynes role as an advisor to the British organisation on war date economy and Hayek as an Austrian soldier). Keynes predicted that the result of the treaty of Versailles and demanding reparations from an already bankrupt Germany and Austria would cause other war, The Second World War. slowdown Hayek and his disciple Zlabinger fought against hyper inflation and encouraged free markets. Simultaneously the American deliverance was booming, till October 24th, 1930 when the great depression hit and unemployment soared and industr y stopped and half of the US banks were closed down. During this time Keyness theory of government intervention helped lead the way out of the problem (Keynes wrote about Macroeconomics). Meanwhile Lenin had introduced the New Economic Policy which consisted of grass root level capitalism but the commanding heights would still be under the government. The reform was met with scrutiny from the left, soon after Stalin took power and employed change planning of every economic aspect. Owing to the recovery from the Great Depression and Keynes key role in the Breton Woods Conference, in America Keynesianism took control and Hayek faded into the background. In Britain a welfare state and socialism built the country back from the bottom up. Newly independent countries like India also employed Keynesian methods, allowing for State led industry. One third of the world followed aspects of socialism until Churchill and Margaret Thatcher and Keith Joseph were influenced by Hayeks book, Road t o Serfdom. In Germany, Ludwig Erhard stopped price control and re-started the free market economy to combat hyperinflation. The success of his risky stopping point led to the German Economic Miracle. While Keynes still had a strong hold over Washington, a Chicago School of Economics was created and it emphasised Hayeks theory as a measure to difference of opinion stagflation. Finally Thatchers election and confidence in Hayeks theory allowed for free markets to be launch again. Thus, after a period of a century came back to where it was at the beginning of the century, back to free markets.